Alternative Energy and EROI

by Catherine Haug

ESP is planning our April 28, 2010 event on Alternative Energy, a topic many of our community support as we face declining petroleum reserves and impending climate change. But the underlying cost of alternative energy production is often left out of the discussion. [NOTE: that event has been postponed until June 23, 2010].


One way of considering that cost, is as Energy Return on Investment (EROI), also known as Energy Return on Energy Investment (EROEI). Basically, this considers the input cost to generate the energy as well as the energy output, as:

Quantity of Energy Output divided by Quantity of Energy Input

The higher the EROI, the better the choice of energy production. So it has been proposed to use EROI as the litmus test for alternative production systems.

However, please consider: No energy production method gets a perfect score on the EROI test. That’s because of the 2nd law of Thermodynamics, which basically states that perpetual motion is impossible; there must always be an energy input to keep the motion going. Or another way of stating the law: There’s no such thing as a free lunch.

ESP proposes to consider the implication of EROI as we discuss and explore the different alternative energy solutions that have become popular.

Consider these few examples:

  • Hydroelectric: Yes, the water going through the turbines is “free” but energy was expended in the production of the turbines and the building of the dam and powerhouse. Plus the water is heated in this process, and must then be cooled to avoid killing aquatic species that live in the heated water; this cooling also consumes energy. However, most hydro-power facilities do not cool the water.
  • Solar: energy is expended in production of solar equipment);
  • Wind: energy is expended in production of windmills;
  • Biodiesel: energy is expended in the conversion of biomass to diesel, and in the growing of the biomass. Plus, the soil that would otherwise be used to produce food, is sacrificed to the production of biomass.
  • Corn ethanol: energy is expended in the production of the chemical fertilizers used to grow the corn, and in the conversion of the corn to ethanol.
  • Power Lines: All examples of community power require installation of power lines, etc to get the power from the production facility to the consumer of the power. And those lines also require energy in the mining of the metals, the manufacture of the lines and poles or conduits, and the installation of the lines and poles or conduits.

Discussion of the terms ERoEI and EROI

from Edmund Fitzgerald

“EROI [Energy Return(ed) On Investment] was originally used by economists to describe money put into energy companies and the resultant energy gained from financial investment. This of course, to a scientist or engineer, makes no sense. You cannot create energy by throwing money at the physical world, though economists still believe this silliness.

ERoEI [Energy Return(ed) on Energy Invested] was put forth by ecologists, geologists and engineers, to equate energy input with output, and to clarify that one must put energy into the system to get energy out. Thus input and output are described similarly. This led to the obvious concept of “net energy.”

Later, even that was deemed incomplete, as the totality of inputs to an energy extraction system (oil wells, for example) includes more than just energy. Inputs also include human inventiveness, ecological damage and pollution remediation, the sandwiches the truck drivers eat for lunch, the pain on the drilling rig, etc..

As a result, the original term, EROI, was revisited, but defined to include ALL “investment” inputs, including money, direct energy and indirect everything else..”

For More Information

To learn more about this topic, here’s a few starting points:

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